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Once start up giant 'Digg' sold for mere $500,000

Fri, 13/07/2012 - 17:37 by RESHMI CHAKRAVORTY

Digg, the 'social news' site which was once the poster child for Web 2.0 and valued at up to $175m, has been sold to New York technology development company Betaworks for just $500,000 (£324,000) in cash plus equity.

Digg was founded in 2004. It lets users submit links and either "upvote" or "downvote" other submissions. The site quickly amassed a strong following and grew so popular that some sites crashed out due to less traffic.

In August 2006, Kevin Rose, Digg's founder, appeared on the cover of BusinessWeek and in a feature inside it. At the time the site was described as the 24th-most popular website in the US, "nipping at the The New York Times' (No. 19) and easily beating Fox News (No. 62)", according to industry tracker Alexa.com. The site's value was estimated then at $60m – and it was mentioned in the same breath as the then-fast-growing Myspace.

It was reported in 2008 that Google was in talks to buy Digg for $200 million, but ended up pulling the plug on the deal. Digg's fame didn't last forever. Users began to complained that certain submitters were gaming the voting system and that the commenting sections had devolved.

In 2010 Digg rolled out a site update called v4, but it was full of technical glitches and general changes that the users hated. So much so that some declared an "Abandon Digg Day" and jumped ship to rival service Reddit.

In a statement on its site, Betaworks said; "Digg is one of the great internet brands, and it has meant a great deal to millions of users over the years. It was a pioneer in community-driven news.”

"We are turning Digg back into a startup. Low budget, small team, fast cycles. How? We have spent the last 18 months building News.me as a mobile-first social news experience. The News.me team will take Digg back to its essence: the best place to find, read and share the stories the internet is talking about. Right now."

"In the soon-to-be end, Digg will become known as the first network to die from social fatigue," Mike Phillips wrote way back in June 2010. "Facebook and Twitter are booming, LinkedIn is holding steady and even Myspace seems to have settled into a niche. But Digg is in a deadly, unrecoverable tail spin.”

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